Luxembourg

Foreign tax relief

Foreign income received by residents that is subject to a tax equivalent to Luxembourg income tax and is not exempted by a DTT is granted a tax credit; any non-imputable tax in excess is deductible as a tax-deductible expense.

Tax treaties

Luxembourg has signed 94 DTTs, most of which include provisions of article 26.5 of the Organisation for Economic and Co-operation Development (OECD) model agreement on exchange of information between tax authorities. 86 DTTs are in force and 8 have been signed - not yet in force: Albania, Argentina, Cape Verde, Colombia, Ghana, Kuwait, Montenegro, and Oman. The DTT with Kyrgyzstan has not been signed yet. 

Luxembourg is part of the European Union (EU) Regulations 1408/71 and 883/2004 (as amended) governing coordination of social security systems. In addition, Luxembourg has entered into 41 social security bilateral agreements.

Countries with which Luxembourg currently has DTTs in force:

Framework agreement on social security position of cross-border teleworkers in the European Union

An EU framework agreement on the determination of the applicable social security scheme for certain cross-borders teleworkers within the European Union was published in June 2023. This framework agreement aims to introduce a more permanent arrangement to determine the social security position of cross-border teleworkers in the European Union as of 1 July 2023. More specifically, the framework agreement provides for a system (on the basis of article 16 of Regulation (EC) no. 883/2004 on the coordination of social security systems) whereby, when adopted by the member states involved, teleworking in an employee’s residence state will, if a number of conditions are met, not be taken into account for the determination of the applicable social security scheme if it accounts for less than 50% of their working time.

The principles of the framework agreement only apply when the member states involved in a given situation have both signed the agreement.